Outlook not very bright for region's jobless rate

While an employment report released Friday showed strong jobs numbers nationally for February, the University of Connecticut's latest projections for the Norwich-New London area were far more pessimistic.

A quarterly analysis released Friday by UConn predicted that the region, which saw employment reduced by about 3,000 last year, will see further, less dramatic job erosions in 2013, numbering less than 1,000. The Norwich-New London area already had been singled out as one of the regions in the country that has been the slowest to climb out of the lingering effects of the Great Recession.

The region's unemployment rate, at 8.7 percent during the final quarter of last year, is expected to remain well above the national and state averages, hovering in the 9 percent range, according to the latest edition of The Connecticut Economy, a quarterly UConn publication.

"Unemployment rates seem likely to remain elevated in 2013," the quarterly's executive editor, Steven P. Lanza, said in the report. "All the major regions are apt to see higher jobless rates in 2013, particularly New London, though rates should remain below their 2010 recession peaks."

The UConn projections came out the same day a national jobs report indicated that the United States gained 236,000 jobs last month. Also, the national jobless rate fell from 7.9 percent in January to 7.7 percent in February, the lowest number in four years, the U.S. Department of Labor said.

Lanza, in a phone interview, said the jobs drag in southeastern Connecticut is broadly based, but the government and leisure-and-hospitality sectors are particularly hard-hit here.

Government-sector jobs, down 4 percent here while off only 1 percent in the rest of the state, include workers at both Foxwoods Resort Casino and Mohegan Sun, which have had to reduce their workforces because of declining revenues. Leisure and hospitality hiring, which was up pretty much across the board throughout Connecticut last quarter, fell only in southeastern Connecticut, Lanza said.

"The Norwich-New London area is the one big area of the state that is especially job-challenged," he said.

The rest of the state isn't exactly roaring back, either.

The report said jobs statewide rose by only about 4,000 last year, though the state Department of Labor expects adjusted numbers coming out later this year could boost the figure closer to 10,000. By comparison, according to Lanza, a typical recovery year in the past has seen about 25,000 jobs statewide — though recent recoveries have been closer to 15,000.

"To talk about adding 4,000 jobs out of 1.5 million workers, that's not a whole lot of jobs," Lanza said.

Statewide job growth this year is seen as more problematic. The report said jobs were likely to be flat or decline slightly in the four major regions of Connecticut, with only the Hartford and New Haven regions likely to see gains.

Housing, seen as a bright spot in the state's economy last year, isn't expected to prop up the local market, according to the report. Housing prices for constant-quality homes and new-housing permits in the region are expected to be weaker in 2013 than they were last year, Lanza said.

Permits in the Norwich-New London area could rival the lows of the housing slump between 2009 and 2011, the report indicated.

While Lanza said he doesn't think most attempts to stack the deck in favor of economic growth are effective — saying it's better if the government invests in innovative capabilities and allows the market to decide the most promising initiatives — he did strike a positive note about Gov. Dannel P. Malloy's proposal to spend $1.5 billion over the next few years to grow STEM jobs, or positions in the fields of science, technology, engineering and math.

"STEM won't guarantee a future jackpot," Lanza said in the report, "but since that's where the regional action appears to be, for this recovery at least, it may not be a bad bet."